Lessons from bootstrapped open source companies

One of the fascinating quirks of the podcast recordings I did at State of Open Con last week is that many of the founders had bootstrapped their companies. This was true of Percona, Jetstack, Nextcloud and Murena (which had a kickstarter campaign but I don’t think took venture funding otherwise). That’s unusual for my podcast, and I think fairly unusual for open source startups — though that could just be because bootstrapped startups get less attention, so I’m just less aware of them.

The thing I notice about bootstrapped startups is they almost always have their positioning pretty nailed down from the beginning. They have to focus on a really small market and really specific problem at the beginning, because resources are so constrained. When you have venture funding, it can feel like unlimited funds, plus you’ve just promised your investors that you’re going after a massive TAM. But if you’re not specific at first, it’s super easy to blow through $6 million, and then never get the chance to expand into your massive potential market.

In other words, I think a lot of venture-backed startups could learn from bootstrapped startups to focus on a really specific problem, and use the additional funding not to skip the ‘extreme focus on one very specific problem and market’ phase, but to accelerate how quickly they are able to address that market and then expand into others.